Offshore drilling halted by U.S. on wells with flawed bolts

Drilling regulators directed offshore operators to halt work on some oil and gas wells in the U.S. Gulf of Mexico after discovering faulty bolts on equipment used to prevent blowouts.

Operators were told to suspend work and replace bolts used by General Electric Co. on equipment including blowout preventers, according to a Jan. 29 safety alert issued by the U.S. Bureau of Safety and Environmental Enforcement. The flaw was discovered after a leak of drilling mud from a Gulf well was blamed on bolts that failed due to stress corrosion.

“Everyone in the industry is aware of it,” Sean Gannon, a spokesman for GE, said today in an interview. “We’ve contacted every customer, global regulators. There’s a whole overlapping set of layers where active drilling rigs in particular have been apprised and they’re on top of it.”

A spokesman for the bureau, which is part of the Interior Department, wasn’t available for comment on the alert or the industry’s reaction.

Replacing all bolts on all blowout preventers would have a “significant impact” on the offshore drilling industry, Matt Ralls, chief executive officer at Rowan Companies Plc, told investors today at a conference in Vail, Colorado.

“Everything these days is on significant back order,” Ralls said. “Deliveries have been pushed out on everything and I’m sure if they have to replace all those bolts, it will take a while to get through the whole fleet.”

Pipe Corrosion

Corrosion caused by hydrogen in the liquids in the drilling pipe occurs frequently and can be prevented if operators use the right kind of steel in their equipment, according to Les Ply, a retired drilling engineer who has worked for ConocoPhillips and other operators.

Federal regulators are more diligent in enforcing safety and environmental rules since the fatal 2010 explosion at BP Plc’s Macondo well in the Gulf, Ply said in an interview. Most drilling accidents are avoidable if operators are careful, he said.

The bolts targeted by regulators are used to connect blowout preventers, tubing and other equipment under water. GE-made connectors are used “in every major producing region of the world, and in every type of offshore environment,” according to GE’s website.

Operators Notified

On Jan. 25, regulators “received information from the connector vendor which identified rigs as having blowout preventer stack connectors that may contain bolts that may no longer be fit for purpose,” according to the U.S. safety alert. Operators were notified of the findings and told to inspect their equipment.

Transocean Ltd., the world’s largest offshore rig operator, fell as much as 3.3%, the biggest intraday decline since Nov. 14, and was down $1.18 to $55.60 at 2:25 p.m. in New York trading. Transocean operated the rig BP used when its Macondo well blew out.

“It’s not a question of whether they’re safe,” Gannon said in an interview. “The ones that are actively drilling are pulling them up or might have pulled them up already and bolts are shipping out every day.”

Blowout preventers, known as BOPs, are used by oil companies as insurance against explosive blowouts such as the blast that destroyed the Macondo well. Some drillers have begun doubling up on the $45 million machinery to minimize maintenance delays and shorten drilling time for the most modern rigs that can cost more than $600,000 a day.

The 400-ton fail-safe device monitors pressure levels during drilling, and is designed to pinch off the well in the case of an uncontrolled blast of oil or gas. The device used on BP’s Macondo well in 2010 failed after being jammed by drill pipe in an explosion that sunk the rig.